Disruptive Innovations Report

24 August 2016

By Dieter Adam, Chief Executive, NZMEA

There is a new report out from Citi GPS, called Disruptive Innovations IV, which they describe as ten more things to stop and think about. The report covers some ground, but there are a few points that are worth noting for manufacturers.

Kiwi manufacturers have always been well regarded for their technical skills and ability to create smart solutions, especially in the realm of short-run, high-quality and reliable manufactured products. This is how many manufacturers have overcome the inherent scale and distance to market challenges, not to mention the adverse effects of the exchange rate. However, one area we have heard from members for some time that they see New Zealand lacking in is marketing, both in business to business (B2B), where most of our manufacturers compete in, but also in the business to consumer (B2C) market.

The report talks about one particular development, what they call “Contextual Commerce”. They describe the concept as “Give a consumer what they want when they want it without requiring the consumer to take the initiative or expend much effort in any way.” This idea is driven by the way we all consume information and use a variety of social platforms in our everyday lives, which can also give context to show what a customer wants or needs at that moment.

This goes further to remove a step in the sales process to allow customers to be prompted and given offers and the ability to purchase within their medium of choice – in other words, without having to click through to a different website, as is the case with current contextual advertising in Google searches, for example.

One example used is the ability to order an Uber Taxi directly through Facebook Messenger, when sending an address to a friend.

There are, however, a number of concerns which still need work, such as privacy concerns, safety of payment and how to really interpret the context of a customer’s needs and wants to avoid simply spamming them.

The real question is, will this be relevant for manufacturers in New Zealand? Perhaps not for those in the business-tobusiness space, where building and maintaining long-lasting personal relationships involving face-to-face contact in supply chains is vital. But for those developing direct to consumer marketing, this may be a key trend to watch. When we look at what is happening in other countries – the United States, for example, we find there are many opportunities for manufacturers to increase their activity in the social media space. LinkedIn remains the most popular tool for initiating, building and maintaining B2B relationships, but this is not the only one.

Some Kiwi manufacturers are already well developed in the area, but many may not have expanded their activity. There still is a perception that the use of social media is important in B2C relationships only. The other view is that the use of social media is for big manufacturers only, when in reality there are ways to have an on-line presence that are neither that expensive nor do they require you to employ a specialist for the task.

On-line content marketing is particularly relevant for manufacturers, as videos, pictures and blogs can tell the story of your company, while portraying what makes your product stand out, be it through product or process innovation, superior quality, or the New Zealand brand. One international example of this is GE, who have a range of videos, but one playlist called ‘From the factory floor’, looking at how products are made, etc. More and more manufactures are also using this type of content to add value to their products, through training and support videos and content – this may be one area of opportunity to bridge the gap to our international customers, even showing off capability and skills to develop positions and opportunities in supply chains.

The Report covers other areas of interest like “Clusters of Innovation”, “The future look of devices”, “The Smart Box” and “Open Source Robotics”. While these might not be too relevant to your manufacturing business right now, as there may be many other areas where immediate investment is needed – but like always, being aware of these big future developments is the first step, even if just to know where the competition is heading.